UPDATE: Vivendi 1Q Meets Company Expectations, Keeps Outlook
April 29 2010 - 11:07AM
Dow Jones News
French entertainment and telecommunications company Vivendi SA
(VIV.FR) said Thursday that its performance in the first quarter of
2010 was in line with expectations, and forecast a modest increase
in profits for the full year.
Vivendi chief executive Jean-Bernard Levy told shareholders at
the annual meeting here that Vivendi expects slight growth in
adjusted earnings before interest and tax, its preferred profit
measure, for 2010. Levy didn't disclose financial details for the
first quarter.
This latest full-year outlook was more precise than the forecast
for "further growth" this year that the company made in March.
Adjusted EBIT excludes certain charges relating to acquisitions
and mergers.
In 2009, the Paris-based owner of Universal Music Group, the
world's biggest music company, posted a 3.6% rise in adjusted
EBIT.
Vivendi reports full first quarter results May 11.
Supervisory board chairman Jean-Rene Fourtou said Vivendi will
continue to pay a "high dividend" that will exceed its peers; its
payout for 2009 is EUR1.4 a share.
Vivendi also owns pay-TV operator Canal Plus Group and has
majority stakes in telecom operators SFR and Maroc telecom
(IAM.CL).
Many of investors' questions Thursday centered on a shareholder
class action suit the company is fighting in the U.S., after a jury
there in February found Vivendi liable for misstatements about its
financial health in 2001 and 2002. Vivendi is appealing the
verdict.
Fourtou said the suit could end up costing Vivendi EUR800
million in legal costs and expected damages, for which it has
already set aside EUR550 million. He said the company has spent
about EUR200 million in legal costs since 2002 and could spend a
further EUR50 million.
The Paris court of appeals Wednesday rejected Vivendi's motion
to exclude French shareholders from a class of plaintiffs in the
class action suit, which if accepted would have lowered any
eventual damages.
Fourtou Thursday conceded that then-chief executive Jean-Marie
Messier and others had made grievous strategic and management
mistakes but insisted that no laws were broken.
Meanwhile, current CEO Levy said that it is in Vivendi's
strategic interest to buy the remaining 20% it doesn't already own
of French broadcaster Canal Plus France, which is being put up for
sale by French media group Lagardere SCA (MMB.FR), but only at the
right price.
Analysts say the two groups are at odds over a valuation of the
stake, which Lagardere wants to dispose of because it doesn't fit
in with its core media business. It is exercising an option to sell
the stock under a shareholder pact with Vivendi, which has right of
first refusal over the shares.
Under the terms of that agreement, Lagardere can sell its take
in an initial public offering to third parties if the two can't
agree on a deal. But Levy stressed the partners have only just
begun negotiating over the stock and have years to complete a deal
at an acceptable price.
-By A.H. Mooradian, Dow Jones Newswires; 33 1 4017 1738;
jethro.mullen@dowjones.com
(Jethro Mullen and Ruth Bender in Paris contributed to this
report)
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Order free Annual Report for Vivendi Universal SA
Visit http://djnweurope.ar.wilink.com/?ticker=FR0000127771 or
call +44 (0)208 391 6028
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